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Are Credit Unions a Good Choice for Home Equity Loans?

A credit union is a break from stringent bank formalities. The best one offers low rates on loans with flexible qualification standards. It has a powerful community presence and is often defined as a ‘cooperative financial institution’. No wonder then that the total number of credit union members in the United States has grown steadily for eight years to 2020, reaching more than 126 million. These non-profit organizations are not managed by stockholders. The members are the owners and who ensure affordable loans that work in your best interest.

Consider a home equity loan from a credit union if you wish to use your home’s equity. This tool is flexible and is a source of low-interest cash. It lets you convert the ‘equity’ of your home into ready cash. The repayment will include interest and principal. But what makes a credit union more favorable than a bank when both are similar bodies? Take a look.

No Application Fees

The leading credit union does not charge title, processing, credit report, settlement and underwriting fees. It keeps the loan process from becoming unnecessarily expensive. This helps you meet endless needs with the fund like home renovation or education. Critics argue that application charges are ‘garbage fees’ that increase the closing costs. All you have to pay is the appraisal fees regardless of your membership status.

Credit unions are exempt from corporate income tax on earnings and need to generate only enough for daily fundings. This makes is budget-friendly for people of all income classes.

Easy Support and Service

The home equity loan is a part of the complex world of finance. You might not understand certain terms like Combined Loan-To-Value or Outstanding Rates. But credit unions offer the services of real humans rather than bots. You can ask them live questions. The executives are ready to offer suggestions and recommendations. No wonder the American Customer Service Satisfaction Index for credit unions had once ranged between 81% to 87%. Catering to the members remains one of the guiding principles and core values of these institutions.

Lenient Lending Practices

Several factors like payment history, length of credit history, new credit, credit mix and amounts owed impact your credit report. Studies have found that 90% of top lenders in the US analyze this data before disbursing funds. But a credit union is willing to make an exception in case your credit history is not up to the mark.


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Your credit score might never be a part of the lending formula at all. So, you can apply for a low and fixed-rate home equity loan as per your convenience. All of these make it much easier to obtain a loan without worrying about your existing debts and obligations.

Resources for Education
The world economy is fast changing. Financial literacy is extremely crucial to manage your money well and avoid drowning in debts. Further, it can also protect you from banks that charge unnecessary fees like overdraft fees without your knowledge. Credit unions help eliminate consumer ignorance and turn the community into a better place. You will have better control over your home equity loan EMIs. Customers are more likely to achieve financial stability and make informed decisions.

In short, a credit union is an ideal choice when it comes to home equity loans. Pick an institution that has a fixed rate option available up to 80% and flexible terms on outstanding rates. These will help you address countless possibilities in future.




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